Gauhati High Court
M/S. Purvanchal Communication ... vs Food Corporation Of India And 3 Ors on 4 January, 2021
Page No.# 1/16
GAHC010303582019
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/9153/2019
M/S. PURVANCHAL COMMUNICATION PVT. LTD.
4TH FLOOR BORDOICHILLA BHAWAN (K), ABOVE SAMSUNG PLAZA, G.S.
ROAD, BHANGAGARH, GUWAHATI-781005, REP. BY ITS AUTHORISED
REPRESENTATIVE, SRI KHAJAN CHAND JINDAL.
VERSUS
FOOD CORPORATION OF INDIA AND 3 ORS.
A STATUTORY BODY UNDER THE FOOD CORPORATION ACT, 1964,
HAVING ITS HEADQUARTERS IN NEW DELHI AND A REGIONAL OFFICE AT
GUWAHATI, G.S. ROAD PALTAN BAZAR, ABOVE FBB, MT TOWER (3RD
FLOOR TO 5TH FLOOR), GUWAHATI, KAMRUP (M) ASSAM, PIN-781008,
REP. BY CHAIRMAN AND MANAGING DIRECTOR.
2:THE CHAIRMAN CUM MANAGING DIRECTOR
FOOD CORPORATION OF INDIA
HEADQUARTERS BARAKHAMBA ROAD
NEW DELHI-110001.
3:THE GENERAL MANAGER (R)
FOOD CORPORATION OF INDIA
REGIONAL OFFICE
GUWAHATI
PALTAN BAZAR
GUWAHATI
KAMRUP (M) ASSAM PIN-781008.
4:THE ASSTT. GENERAL MANAGER (CONTRACTS)
FOOD CORPORATION OF INDIA
Page No.# 2/16
REGIONAL OFFICE
GUWAHATI
PALTAN BAZAR
GUWAHATI
KAMRUP (M) ASSAM
PIN-781008
Advocate for the Petitioner : MR. R DUBEY
Advocate for the Respondent : SC, F C I
Linked Case : WP(C)/7073/2019
M/S PURVANCHAL COMMUNICATION PVT. LTD. AND 2 ORS.
4TH FLOOR BORDOICHILLA BHAWAN (K)
ABOVE SAMSUNG PLAZA
G.S. ROAD
BHANGAGARH
GUWAHATI-781005
REP. BY ITS AUTHORIZED REPRESENTATIVE
SRI KHAJAN CHAND JINDAL.
2: SANJIVE NARAIN
MANAGING DIRECTOR
M/S PURVANCHAL COMMUNICATION PVT. LTD.
4TH FLOOR BORDOICHILLA BHAWAN (K)
ABOVE SAMSUNG PLAZA
G.S. ROAD
BHANGAGARH
GUWAHATI-781005.
3: AKSHATA NARAIN
DIRECTOR
M/S PURBANCHAL COMMUNICATION PVT. LTD. 4TH FLOOR
BORDOICHILLA BHAWAN (K)
ABOVE SAMSUNG PLAZA
G.S. ROAD
BHANGAGARH
GUWAHATI-781005.
VERSUS
Page No.# 3/16
FOOD CORPORATION OF INDIA AND 3 ORS.
A STATUTORY BODY UNDER THE FOOD CORPORATION ACT
1964
HAVING ITS HEADQUARTERS IN NEW DELHI AND A REGIONAL OFFICE AT
GUWAHATI
G.S. ROAD
PALTAN BAZAR
ABOVE FBB
MT TOWER ( 3RD AND 5TH FLOOR)
GUWAHATI
KAMRUP (M)
ASSAM
PIN-781008
REP. BY CHAIRMAN AND MANAGING DIRECTOR.
2:THE CHAIRMAN CUM MANAGING DIRECTOR
FOOD CORPORATION OF INDIA
HEADQUARTERS BARAKHAMBA ROAD
NEW DELHI-110001.
3:THE GENERAL MANAGER (R)
FOOD CORPORATION OF INDIA
REGIONAL OFFICE
GUWAHATI
PALTAN BAZAR
GUWAHATI
KAMRUP (M)
ASSAM
PIN-781008.
4:THE ASSTT. GENERAL MANAGER (CONTRACTS)
FOOD CORPORATION OF INDIA
REGIONAL OFFICE
GUWAHATI
PALTAN BAZAR
GUWAHATI
KAMRUP (M)
ASSAM
PIN-781008.
------------
Advocate for : MR. R DUBEY
Advocate for : SC
F C I appearing for FOOD CORPORATION OF INDIA AND 3 ORS.
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:: BEFORE ::
HON'BLE MR. JUSTICE KALYAN RAI SURANA
Advocates for the petitioner: Mr. S. Sarma, Mr. R. Dubey,
Ms. A.B. Kayastha, Mr. A.N.I. Hussain.
Advocates for the respondents: Mr. P.K. Roy, S.K. Chakraborty.
Date of hearing: 15.10.2020, 10.11.2020.
Date of judgment: 04.01.2021.
JUDGMENT AND ORDER (C.A.V.)
Heard Mr. S. Sarma, learned counsel assisted by Mr. R. Dubey, learned counsel
for the petitioners. Also heard Mr. P.K. Roy, learned standing counsel for the respondents.
2) By filing WP(C) 7073/2019 under Article 226 of the Constitution of India, the
petitioners are seeking for quashing and setting aside of the clause nos. 4(II), 4(III) and 4(V)
of the Disqualification Conditions contained in the General Information to Tenderers
(hereinafter referred to as 'GIT' for brevity) appended to the Notice Inviting Tender (NIT for
short) dated 30.08.2019 issued by the respondent no.1 i.e. FCI for the work of " Handling And
Transport Contract Ex-Rly Siding Salchapra to FSD Badarpurghat via Weigh Bridge including
handling at FSD Badarpurghat"; and for directing the respondents to permit the petitioner
no.1 to submit its bid pursuant to the aforesaid NIT. By filing WP(C) No.9153/2019 under
Article 226 of the Constitution of India, the petitioners are seeking quashing and setting aside
of the decision of the respondent no.1, uploaded on 02.12.2019, thereby rejecting the
technical bid of the petitioner no.1 in respect of NIT dated 04.10.2019 for the work of
"Transport Contract Ex-Rly Siding/ FSD Tinsukia to FSD Anini via Weigh Bridge (distance 324
kms)"; and for directing the respondents to consider the bid of petitioner no.1 company as
technically responsive in view of stay order passed in Misc.(Arb.) Case No.44/2019; and for
further directing the respondent no.1 authorities to open the price bid of the petitioner no.1
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in respect of the aforesaid NIT. Upon being submitted that both the writ petitions are
interconnected, both the writ petitions have been analogously heard.
3) The undisputed backdrop of these two writ petitions are that the
petitioner no.1 has an interest in a proprietorship farm in the name and style of Purvanchal
Communication, which entered into a joint-venture with one Radhika Express Service and in
the name and style of Purvanchal Communication Radhika Express (JV) and participated in a
tender process bearing tender no. CE/COM/N-K/CRG/201709/RT-1 issued by the N.F. Railway
authorities for the work of "Loading, Unloading and Transportation of Rails, PSC BG Sleepers,
PSC Turnout Sleepers, other PSC Spl Sleepers, other P.Way Fittings and Materials etc. with
including all Lead, Lifts and Stacking at various locations and in Station Yards from Km.88.0 to
176.0 in connection with Doubling Project of NBQ-GLPT-KYQ (two packet tender). It is
projected that the petitioner no.1 was the lead partner of the joint-venture with 51% share
while the other joint-venture partner had 49% share. For reasons sought to be justified by
the petitioners, the said joint-venture could not deposit the performance guarantee in time,
as such, by a letter dated 20.12.2018, the Chief Engineer/Con/IX, N.F. Railway terminated the
contract arising out of the hereinbefore mentioned tender and by forfeited the EMD i.e.
Earnest Money Deposit of Rs.17.00 lakh was forfeited and the said joint-venture was barred
from participating in the re-tender of the said work. Thereafter, the petitioner no.1 had
participated in another tender process of the FCI bearing NIT dated 29.05.2019 and came out
as a successful bidder. However, the said tender process was challenged by filing WP(C) No.
5094/2019 and ultimately in view of the challenge, the respondent no.1 withdrew the
contract which is reflected in the order dated 28.08.2019 passed by this Court in the
aforesaid writ petition. The petitioners project that the adverse effect of the termination of
contract by the N.F. Railway became known to the petitioner for the first time after filing of
WP(C) No. 5094/2019. Thereafter, on the ground that the N.F. Railway authorities had not
followed clause 36 of the Tender Conditions before terminating the contract and forfeiting
EMD, after service of notice, the petitioner no.1 took recourse to law by filing an application
under section 9 of the Arbitration and Conciliation Act, 1996 and the Additional District Judge
(FTC) No.3 Kamrup (Metropolitan), Guwahati by order dated 13.09.2019 stayed the
termination of contract and forfeiture of EMD issued vide letter dated 20.12.2018. In the
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meanwhile, the N.F. Railway authorities by their letter dated 30.08.2019 clarified that the
petitioner no.1 would not be barred from participating in other tenders of the railways and in
other departments. Under the aforesaid facts, the petitioners filed WP(C) 7668/2019 to
challenge the rejection of the technical bid of the petitioner in connection with NIT dated
13.09.2019 for the work of "Handling and Transport Contract Ex-FCI Siding Changsari (CFCC)
to FSD Changsari (CFCC) via Weigh Bridge (Inter-shed movement)(distance 0.86 Kms)
including handling at FCI Siding Changsari (CFSS)" and this Court by order dated 16.10.2019
provided that if any letter of acceptance is issued to any successful bidder, the same will be
subject to the outcome of the writ petition. Thereafter, as regards tender notice dated
04.10.2019, the technical bid of the petitioner was rejected and uploaded in the website on
02.12.2019 wherein it was indicated that the bid was rejected as per clause no.4(II) and (III)
of the Disqualification Conditions contained in the General Information to Tenderers.
4) The learned counsel for the petitioner contends that the joint-venture of
the petitioner no.1 had good grounds and reasons for not being able to deposit performance
guarantee within the time allowed and for such default, the N.F. Railway authorities merely
barred the petitioner no.1 to submit bid in the re-tender process, which did not act as a
disqualification for participating in any other tender issued by the Railways. Hence, the
decision of the respondents to perpetually debar the petitioners from participating in their
tender process amounts to illegal and colourful exercise of power for permanently blacklisting
the petitioner, which could otherwise not be done without taking recourse to the procedure
prescribed for blacklisting any tenderer. It is further submitted that termination of contract
and forfeiture of earnest money are separate and independent cause of action compared to
the blacklisting of the petitioner in disguise and accordingly, it is submitted that the
blacklisting in disguise without taking recourse to the procedure prescribed for blacklisting is
not sustainable on facts and in law.
5) It is submitted that WP(C) 5094/2019, having been withdrawn, there was
no adjudication of the lis on merit and, as such, the interim orders passed in the said writ
petition would not amount to a binding precedent so as to disqualify the petitioner to
participate in any subsequent tender issued by the respondents. It is also submitted that the
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operation of the letter of termination and forfeiture of EMD vide letter dated 20.12.2018 was
stayed by order dated 13.09.2019 passed by the learned Additional District Judge (FTC) No.3,
Kamrup (Metropolitan), Guwahati. Hence, it was not open to the respondents to rely upon the
termination order dated 20.12.2018.
6) In support of his submissions, the learned counsel for the petitioner has
relied on the following cases, viz., (1) UMC Technologies Private Limited Vs. Food Corporation
of India & Anr., (2020) 0 Supreme(SC) 660; (2) Shree Shyamji Transport Company Vs. Food
Corporation of India & Ors., (2015) 1 SCC 440; (3) Gorkha Security Services Vs. Govt. of
NCT of Delhi, (2014) 9 SCC 105; (4) Suresh Dhanuka Vs. Sunita Mohapatra, (2012) 1 SCC
578; (5) Arvind Construction Co. (P) Ltd. Vs. Kalinga Mining Corporation & Ors., (2007) 6 SCC
798; (6) Raghunath Thakur Vs. State of Bihar, (1989) 1 SCC 229; (7) Erusian Equipment &
Chemicals Ltd. Vs. State of West Bengal, (1975) 1 SCC 70; (8) Imran Hussain Laskar Vs.
State of Assam, 2017 (4) GLJ 289: (2018) 2 GLR 286; (9) UMC Technologies Pvt. Ltd. Vs.
Food Corporation of India, (2019) 0 Supreme (MP) 472; (10) R.S. Labour and Transport
Contractor Vs. Food Corporation of India, (2017) 0 Supreme(P&H) 296; (11) Shree Shyamji
Transport Company Vs. Food Corporation of India & Ors., CWP No. 21694 of 2001 (O&M),
decided by High Court of Punjab & Haryana on 06.04.2012.
7) Per contra, the learned standing counsel for the respondents has made his
submissions to justify the rejection of technical bid of petitioners and it is submitted that as
on date, the Disqualification Conditions contained in the General Information to Tenderers
('GIT for brevity), as contained in the NIT floated by the respondents have not been
interfered with and, as such, the said conditions cannot be said to be invalid or bad in law.
Moreover, it is submitted that the said disqualification conditions have general application and
the said conditions are not mala fide and are not designed to debar the petitioners, but the
said clauses have been incorporated to ensure that food distribution chain is not disrupted
merely because the respondents have engaged a tenderer whose transportation contract
work had been terminated with forfeiture of EMD. It is submitted that the letter dated
12.09.2019 by which the respondents had terminated the contract of the petitioner as well as
the re-tendering of the work vide NIT dated 13.09.2019 as well as the letter of acceptance
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dated 15.10.2019 issued after re-tendering had remain unchallenged, the present challenge
would not be maintainable. In support of his submissions, the learned counsel for the
respondents has referred to the following cases, viz. (1) Bharat Coking Coal Ltd. Vs. AMR Dev
Prabha, (2020) 0 Supreme(SC) 274; (2) Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail
Corporation Ltd., (2016) 16 SCC 818; (3) Michigan Rubber (India) Ltd. Vs. State of
Karnataka, (2012) 8 SCC 216 (4) Shree Chamundi Mopeds Ltd. Vs. Church of South India
Trust Association, AIR 1992 SC 1439; (5) Poddar Steel Corpn. Ltd. Vs. Ganesh Engineering
Works & Ors., AIR 1991 SC 1579; (6) G.Z. Fernandez Vs. State of Karnataka & Ors., AIR 1990
SC 958; (7) Narayani Trading Co. Vs. State of Assam & Ors., W.P.(C) 976/2017, decided on
09.08.2017: (2017) 0 Supreme(Gau) 948.
8) Perused the pleadings and documents available in the writ petition, affidavit-
in- opposition, affidavit- in reply and written notes of argument submitted by both sides in
connection with the two writ petitions.
9) The basic pillars upon which the edifice of these two writ petitions is case is
built up are (i) the petitioners had valid reasons for not being able to provide performance
guarantee to the NF Railway in connection with their tender awarded to the joint venture
where the petitioner no.1 is one of the constituent; (ii) by order dated 13.03.2019 passed by
the learned Addl. District Judge (F.T.C.) No.3, Kamrup (Metropolitan) in Misc. Arb. Case No.
44/2019, the communication dated 20.12.2018 by which not only the NF Railway had
terminated their contract awarded to the joint venture of the petitioner no.1 was terminated
but the EMD was also forfeited was also stayed; (iii)
Effect of order dated 13.09.2019 passed in Misc. Arb. Case No. 44/2019 in these two writ
petitions:-
10) The order of stay dated 13.09.2019 passed in Misc. Arb. Case No. 44/2019
does not specifically indicate that the said would operate retrospectively w.e.f. 20.12.2018,
i.e. the date of letter of termination, as such, the petitioners could not produce any document
by which the NF Railway authorities had either restored the terminated contract work in
favour of the joint venture of the petitioner no.1 and the petitioners have also not produced
any document by which the forfeiture of the EMD was restored by NF Railway authorities in
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favour of the joint venture of the petitioner no.1. Moreover, the said order dated 13.09.2019
was passed in an application purportedly made under section 9 of the Arbitration &
Conciliation Act, 1993 and there is no document on record that the said NF Railway's letter of
termination dated 20.12.2018 was set aside by or quashed by Arbitral Tribunal. In this regard,
reference may be made to the case of Shree Chamundi Mopeds Ltd. Vs. Church of South
India Trust Association, Madras (1992) 3 SCC 1, wherein it was well settled that quashing of
an order results in the restoration of the position as it stood on the date of passing of the
order which has been quashed and that the stay of operation of an order does not, however,
lead to such a result, but it only means that the order which has been stayed would not be
operative from the date of passing of the say order and does not mean that the said order
has been wiped out from existence. Therefore, the order dated 13.09.2019, does not appear
to help the petitioners in any manner whatsoever.
11) There is another way to appreciate the herein before referred order dated
13.09.2019. On a perusal of the said order dated 13.09.2019 [Annexure-16 to WP(C)
9153/2019], it appears that one of the petitioners before the Court below was " Purbanchal
Communication Radhika Express (JV)". However, the said joint venture is not arrayed as a
party in these two writ petitions. Moreover, the said order does not indicate that the
respondents herein were arrayed as parties in the said Misc. Arb. Case No. 44/2019 and from
the cause title of these two writ petitions, it is apparent that the NF Railways are not parties
in these two writ petitions. Under such backdrop, when no attempt to demonstrate before the
Court that how the respondents herein would be bound by the said order dated 13.09.2019,
the Court is constrained to hold that the respondents herein would not be bound by the order
dated 13.09.2019. Hence, the said order dated 13.09.2019 does not appear to help the
petitioner in any manner. It may be mentioned that in this regard, the learned counsel for the
petitioner had placed reliance on the case of Arvind Constructions (supra), wherein Arbitral
Tribunal was in seisin of the dispute, but as indicated herein before, in the present case in
hand the respondent was not a party to the interlocutory application filed under section 9 of
Arbitration & Conciliation Act, 1993 and there is no document on record to show that any
dispute between the NF Railway and the petitioner was finally decided by an Arbitral Tribunal.
Thus, the status of the petitioner vis-à-vis the terminate contract and forfeiture of earnest
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money was never decided by a competent Court of forum. For the same reason the present
case is distinguishable from the facts of the cited case of Suresh Dhanuka (supra), where in
an intra-parte dispute, the order of injunction which had restrained the manufacture of
products under deed of assignment was set aside despite termination of joint venture
agreement.
12) In the aforesaid context, it would be of profit to refer to the provisions of
section 42 of the Evidence Act, 1872 and illustration appended thereto, which is as follows:-
"42. Relevancy and effect of judgments, orders or decrees, other than those
mentioned in section 41.- Judgments, order or decrees other than those mentioned in section
41, are relevant if they relate to matters of a public nature relevant to the enquiry, but such
judgments, orders or decrees are not conclusive proof of that which they state.
Illustration
A sues B for trespass on his land. B alleges the existence of a public right of way over the
land, which A denies.
The existence of a decree in favour of the defendant, in a suit by A against C for a trespass
on the same land in which C alleged the existence of the same right of way, is relevant, but it is not
conclusive proof that the right of way exists."
13) Therefore, in the present case in hand, when it is not in dispute that the
respondents were not a party in the proceedings of Misc. Arb. Case No. 44/2019, by virtue of
section 42, the order dated 13.09.2020 cannot be said to be relevant as the said order does
not relate to matters of public nature. Moreover, the order dated 13.09.2020 was in
connection with an application under Section 9 of the Arbitration and Conciliation Act, 1993,
which is an order of injunction. In this context, this Court is of the considered opinion that the
power to grant injunction under Section 9 of the 1993 Act is nothing but a supplemental
proceeding similar to such proceeding as envisaged under section 94 CPC under Part-VI of
the Civil Procedure Code. Just like it is not necessary that an order passed in a supplemental
proceeding would influence the final decision in the suit, similarly, an ad interim temporary
injunction granted by a Court of competent jurisdiction in exercise of power under section 9
of the 1996 Act would have no persuasive value before the arbitral tribunal while granting
final relief. Therefore, the case of Arvind Constructions (supra) and Suresh Dhanuka (supra)
does not help the petitioner in any manner. Accordingly, in light of the discussions above, the
Court is inclined to hold that the order dated 13.09.2019 passed in Misc. Arb. Case No.
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44/2019 would not come to the aid of the petitioners in these two writ petitions. Thus, the
point is answered by holding that the order dated 13.09.2019 passed by the learned civil
Court in Misc. Arb. Case No. 44/2019 would have no effect on these two writ petitions.
Whether clause nos. 4(II), 4(III) and 4(V) of the Disqualification Conditions contained in the
GIT appended to the NIT dated 30.08.2019 are liable to be set aside and quashed?
14) A portion of the herein before referred order dated 13.09.2019, which
appears to the Court to be relevant for this point of determination is quoted below:-
"... None of the constituents of the petitioner J.V. were aware of the
consequences of the letter dtd. 20-12-18 by which their contract was
terminated and the EMD was forfeited. Although they were
contemplating to take appropriate legal steps in the matter but could not
take the same for one reason or the other. Recently, Purbanchal
Communications Pvt. Ltd. participated in a tender process floated by
Food Corporation of India and came out as a successful bidder. When a
challenge was made to its technical qualification before the Hon'ble High
Court by another bidder in WP (C) No. 5094 of 2019, the petitioner and
its constituents came to know about the serious ramification of the
termination and forfeiture of the earlier contract."
15) It may be pertinent to mention herein that the learned counsel for the
petitioners had made an emphatic submission to the effect that the termination of contract
and forfeiture of EMD by the NF Railway merely prevented the joint venture of the petitioners
to participate in the re-tender process and did not operate as a disqualification to participate
in other tenders of the NF Railway, as such, the disqualification clause contained in the NIT of
the respondents was harsh as it amounted to colourable blacklisting of the petitioners. Thus,
notwithstanding the projection made by the petitioners that the constituents of the joint
venture of petitioner no.1 might not be aware of the consequences of clause nos. 4(II), 4(III)
and 4(V) of GIT appended to NIT, but the petitioners had participated in the NIT of the
respondents with the said clause contained in the NIT. The petitioners had admitted that they
were awarded with a contract work by the respondents, which was challenged by another
contractor by filing W.P.(C) 5094/2019, which resulted in revocation of LoI (letter of intent)
dated 09.07.2019 by the respondents herein, upon which the said writ petition was disposed
of. Thus, there is nothing on record that the said action of the respondents to revoke LoA
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dated 09.07.2019 was assailed by the petitioners. There is also nothing on record that the re-
tending owing to revocation of LoI was assailed by the petitioners, rather, the petitioners had
again participated in the re-tendering process, wherein their bids were held to be non
responsive and the successful bidder was awarded the contract, and the Letter of Acceptance
dated 05.10.2019 was not assailed by the petitioners. Nonetheless, the aforesaid clause nos.
4(II), 4(III) and 4(V) of GIT appended to NIT has been assailed in WP(C) 7073/2019.
Therefore, when the petitioners had accepted their debarment in respect of previous tender,
and had participated in the present tender process without challenging the said clause nos.
4(II), 4(III) and 4(V) of GIT, it would be too late to assail the said clauses after the
respondents have invoked the said clauses and held the bid submitted by the petitioners to
be non responsive.
16) The learned counsel for the petitioner has placed reliance on the case of UMC
Technologies (supra). In the said case, reference has been made to the following cases cited
by the learned counsel for the petitioner, viz., Erusian Equipment & Chemicals Ltd. (supra),
Raghunath Thakur (supra), Gorkha Security Services (supra) . However, on the unique facts of
this case, the cited case can be distinguished because the petitioner was not black-listed in
the present case in hand, but in the present case in hand, the contract work of NIT dated
29.05.2019, awarded to the petitioner had been withdrawn and that the petitioner was held
to be technically non-responsive in NIT dated 13.09.2019, followed by absence of challenge
to the letter of acceptance dated 15.10.2019 after re-tendering. It appears from the facts of
the cited case of UMC Technologies (supra) that in that case the FCI had issued an order
dated 09.01.2019 by which the contract of the petitioner was terminated, its security deposit
was forfeited and it was debarred from participating in any future tenders of the Corporation
for a period of 5 (five) years, which is not so in this case in hand, rather, in this case, the
respondents are debarring the petitioner from participating in their tender on the strength of
clauses contained in clause nos. 4(II) and 4(III) of the disqualification conditions contained in
the General Information to Tenderers. Thus, in the present case in hand, the cause of
debarment of the petitioner as contained in the terms and conditions of the tender had been
acted upon. The case of M/s. R.S. Labour and Transport Contractor (supra) and Gorkha
Security Services (supra), also relates to blacklisting, as such, on facts the said case is
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distinguishable. Moreover, it may be mentioned herein that in the case of M/s. R.S. Labour
and Transport Contractor (supra), the High Court of Punjab and Haryana had not approved of
condition incorporated as tender condition by the respondent- FCI that forfeiture of EMD in
one contract could be the basis of disqualification from participating in tenders floated by FCI.
However, by producing an uncertified copy of the order dated 08.01.2020, passed by the
Supreme Court of India in SLP (C) No. 17191- 17193 of 2017 (FCI Vs. M/s. R.S. Labour and
Transport Contractor), it was submitted by the learned standing counsel for the respondents
that notwithstanding that the SLP filed by the FCI was dismissed as infructuous, but the
question of law was kept open. Therefore, in the considered opinion of this Court, the ratio
laid down in the case of M/s. R.S. Labour and Transport Contractor (supra) , with all respect,
cannot be said to have any persuasive value in the present case in hand.
17) It appears that although the consequences of clause nos. 4(II) and 4(III) of
the disqualification conditions contained in the General Information to Tenderers, but the
Court is not convinced that such condition amounts to black-listing. Black's Law Dictionary,
Seventh Edition defines "blacklist" as "to put the name of (a person) on a list of those who
are to be boycotted or punished." As per The Law Lexicon by P. Ramanatha Aiyer (Reprint
2002), "Black List" is a list of persons or firms against whom its compiler would warn the
public, or some section of the public; a list of persons unworthy of credit, or with whom it is
not advisable to make contracts. Thus the official list of defaulters on the Stock Exchange is a
black list. To put a man's name on such a black list without lawful cause is actionable; and the
further publication of such a list will be restrained by injunction (Ency. of the Laws of
England)." Thus, it appears that the 'blacklisting" has different purport and connotations, for
its publication warns others not to deal with the persons whose name appear in such a list,
for which there are judicial pronouncements requiring adherence to natural justice before the
blacklisting. Thus, the Court is unable to accept the argument advanced by the learned
counsel for the petitioner that the effect of clause nos. 4(II) and 4(III) of the disqualification
conditions contained in the General Information to Tenderers amounts to colourable use of
power to blacklist and that the said clause amounts to blacklisting the petitioner in disguise.
18) In the case of Imran Hussain Laskar (supra), the petitioner therein had
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participated in the tender, which could not be brought to its logical end. On re-tender, the
petitioner was the highest bidder. The highest bidder in previous tender had assailed the re-
tender, which was disposed of by directing the authorities to settle the tender with the
highest bidder. As nothing was done, the petitioner therein preferred another writ petition,
which was disposed of by directing the authorities to dispose of the representation for return
of earnest money. The authorities forfeited the earnest money on the ground that the
petitioner was a defaulted in another tender awarded to him. Thus, the case cited by the
petitioner came to be filed, and that the petitioner had been able to satisfy this Court that he
was not a defaulted in previous tender, as such, by interfering with the order of forfeiture,
direction was issued to show cause and decide whether the petitioner was a defaulter or not
and on satisfaction that the petitioner is not a defaulter, the earnest money be refunded to
him. Thus, on facts, the cited case is totally dissimilar to the facts of the present case in
hand.
19) The present case relates to transport handling of food grains meant for public
distribution system. Hence, the Court perceives the present contract to be an essential service
in greater public interest. There is nothing on record from which the Court can draw a
presumption that the said tender condition was to favour someone or mala fide. There is no
material on record from which it can be held that the tender clauses were arbitrary or
unreasonable. Therefore, as constituent of the joint venture, when the NF Railway, which is a
Govt. of India enterprise had revoked and/or rescinded the tender work awarded to the joint
venture of the petitioner no.1 on the ground that performance guarantee could not be
provided and that the EMD was forfeited, the Court does not find any fault in the clause nos.
4(II), 4(III) and 4(V) of GIT appended to the NIT, by virtue of which a bidder can be
disqualified. In the considered opinion of the Court, in commercial considerations, it is within
the domain of the respondents to decide that they do not want to award work to a bidder
who has defaulted in any previous contract work given by other Government department of
agencies. In this connection, reference may be made to the case of Jagdish Mandal Vs. State
of Orissa, (2007) 14 SCC 517, wherein the Supreme Court of India has, inter-alia, laid down
that a court before interfering in tender or contractual matters in exercise of power of judicial
review, should pose to itself the following questions, viz., (i) Whether the process adopted or
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decision made by the authority is mala fide or intended to favour someone; or (ii) Whether
the process adopted or decision made is so arbitrary and irrational that the court can say "the
decision is such that no responsible authority acting reasonably and in accordance with
relevant law could have reached"; and (iii) whether public interest is affected? It was held
that if the answers are in the negative, there should be no interference under Article 226 of
the Constitution of India. In the present case in hand, the aforesaid three questions can all be
answered in the negative. Therefore, no case is made out for interfering with the said clause
nos. 4(II), 4(III) and 4(V) of GIT appended to the NIT.
20) The learned counsel for the petitioner had referred to the case of Shree
Shyamji Transport Company Vs. Food Corporation of India, (2015) 1 SCC 440 and it was
alternatively contended that clause nos. 4(II), 4(III) and 4(V) of GIT appended to the NIT be
declared as not mandatory. In the said case, the Supreme Court of India had referred to the
finding of the High Court FCI did not have any intention to invoke clause 7 of MTF indicating
that the FCI preferred not to debar the contractor for the contract period. However, similar
fact situation does not exist in the present case in hand because the respondents had
previously also debarred the petitioner from subsequent contract as elaborately discussed
above, as such, the cited case of Shree Shyamji Transport Company (supra) would not come
to the aid of the petitioner because by conduct the respondents have demonstrated that they
intent to adhere to clause nos. 4(II), 4(III) and 4(V) relating to essential conditions of
eligibility and in this regard, with profit, one may refer to the case of G.J. Fernandez (supra),
where the Supreme Court of India had observed that where the party did not deviate or want
to deviate from this established procedure in regard to contracts of this nature, but decided
to adhere to the said procedure, the High Court was right in declining to interfere and it was
further observed that the party issuing the tender has a right to punctiliously and rigidly
enforce them. Therefore, in light of the ratio laid down in the case of G.J. Fernandez (supra),
the case of Shree Shyamji Transport Company (supra) would not come to the aid of the
petitioner.
21) In view of the discussions above, the Court is of the considered opinion that
in any view of the matter, clause nos. 4(II), 4(III) and 4(V) of the Disqualification Conditions
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contained in the GIT appended to the NIT dated 30.08.2019 are not liable to be set aside and
quashed under the unique facts of this case.
22) These two writ petitions, therefore fail and both the writ petitions stand
dismissed. The parties are left to bear their own cost.
JUDGE
Comparing Assistant
